The conviction of Raj Rajratnam for insider trading supplies evidence against which form of the efficient markets hypothesis?
A)Weak-form efficiency
B)Semistrong form efficiency
C)Strong-form efficiency
D)It is evidence against all forms.

Question

Quizplus · Accepted Answer

Strong-form efficiency suggests that all information, including insider information, is reflected in stock prices. Raj Rajaratnam's conviction for insider trading indicates that insider information was not reflected in stock prices, thus contradicting strong-form efficiency.

The Conviction of Raj Rajratnam for Insider Trading Supplies Evidence